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High Lending Rates Harming Manufacturing

Head of the Manufacturing Cooperatives Union railed against high lending rates for manufacturers, saying that the extremely high rates are resulting in more foreign products flowing into the country.

“While state-owned companies are struggling to compete with foreign rivals, private manufacturers are given the short shrift,” Alireza Moradi said, as reported by Akhbar Bank news website.

“Domestic products can even be exported to regional markets”, Moradi said, adding that sanctions have not undermined the manufacturing sector as much as defective economic policies and lack of support from the banking system has taken its toll .

The Money and Credit Council has recently put a 24 percent cap on lending rates, four percent lower than the previous rate, in a bid to boost domestic manufacturers.

He complained that while virtually everything is being imported, “we can indigenize them in the country at a lower cost.” Moradi proposed that the government cancel the unemployment insurance policy and instead use its revenues to fund manufacturing cooperatives, a move he said, could promote sustainable growth and boost general welfare.

“Creating more jobs using the unemployment insurance funds not only would help redress the current situation but also lead to more satisfaction among the people”, he added.